How to ruin your financial life

Years ago when I told my father that I could buy a certain estate [which was bigger than I really needed] and still be years away from being in the neighbourhood of poverty, he said, “Good, because that’s a neighborhood you never want to be in.” That’s what this article is about. Do the things mentioned here consistently, and you’ll find yourself in the neighbourhood of poverty. Do them very rarely and you’ll sleep soundly at night in a nice neighbourhood.

Let me make this point as clear as possible: This article is called How to Ruin Your Financial Life for a reason: If you follow the rules in it, you will ruin your financial life. If you do the opposite, sunny days lie ahead.

Without further ado, here are the rules. I’m positive that I’ve probably missed some ways in which you can ruin your financial life—maybe even some important ones—but let’s just get on with it. My motto, borrowed from the genius editor Jim Bellows, applies here in spades: “Begin at once, and do the best you can.”

1. Forget about tomorrow

That’s right. It’s always today. Tomorrow will never come at all, so don’t make any plans for the future. Making plans is a lot of work, and thinking about the future is frightening. It’s a lot easier to just think about today.

Plans for the future involve calculations and variables and may require some form of self-discipline—yuck. Plus, there’s so much uncertainty about the future that sometimes you don’t really feel good when you think about it. So why think about it at all? It’s just a way to get prematurely gray. Instead, think about what fun you can have now, and how much enjoyment and spending you can cram into one day.

2. Know with certainty that there will never be any rainy days in your life

There’s a lot of talk among old people about saving for a rainy day. There could be a recession, or a new inflation or deflation, or a real-estate collapse, they’ll say. You could lose your job. It happened to them after all. That’s why, they’ll tell you, you need to put aside money for a “rainy day.”

The only problem with this admonition is that it doesn’t apply to you. There will be no rainy days in your life. And if you plan for them, then you will have penalized yourself by saving money, and not splurging on that vacation or new car you wanted.

Just go on with your life knowing that all is fundamentally well, and that the bad things that happened to other people in other eras will simply never happen to you. It’s that basic. You don’t need to make any plans for economic security because your life will never have any downs, only ups.

3. Don’t bother to learn anything at all about investing

Life is short—far too short to spend your free time reading some dusty old tome on investing your money. Who does that kind of thing anyway? Nerds and worrywarts, and goofy guys with Coke-bottle glasses and pens in their pockets. You’re far too cool to even think of poring over books with charts and graphs and explanations of why stocks are sometimes better than bonds, and bonds are sometimes better than stocks. Who needs that kind of stuff?

4. Don’t balance your checkbook or keep track of what you spend

Why should you? The bank will send you a little form if you’re overdrawn, won’t they? In the meantime, you’ll want to avoid that uncomfortable feeling of being hemmed in by lots of numbers and columns of figures, and instead, just do what’s fun and easy.

After all, you’re not a machine.You can’t be programmed to function like a human calculator. You need to be your own sweet, carefree self. Besides, if you keep track of how much you spend, it might depress you.

So please don’t do it.

5. Forget to pay your taxes

Why does the government need the money anyway? They already have trillions. And they have legions of employees and office buildings, and lots of aircraft carriers and submarines. They do not need your few measly pennies. They don’t care about you.
If the tax guys somehow track you down, demanding the money you owe them, then borrow a line from the immortal Steve Martin and say, “Hey, I forgot.” What can they do? It’s not like you’re an ax murderer. You simply “forgot” [wink, wink] to pay your taxes. If you have your taxes deducted from your pay check, take the maximum number of deductions you can. Then, when it comes close to April 15, just don’t file your income taxes at all, period. That way you get to keep all of that extra money that wasn’t withheld from your pay check. It’ll take years, maybe decades for the tax guys to catch up with you. And when they do, at most they’ll just smack your hand and give you a big frown.

An added bonus: If you do get involved with litigating against the government over back taxes, you’ll be amazed by how little tax lawyers charge. These attorneys will practically give away their services to you, and the fees and expenses can be comically low.

Try it. You’ll see. The tax guys really just want to be loved, same as you and me.

6. Truly believe that you’re only as valuable as what you own

Look, this is between you and me, right? It’s not as if anyone can read your mind and know what you’re thinking. So, just between us, even though you’re overweight, have a lousy job, and are miserable in your relationship, you know how to make yourself feel empowered, don’t you? You know how to build your self-esteem. You know that the way to feel like a superhero is to buy the right things so you can feel great about yourself.

You may have heard that happiness is an inside job. Baloney! Happiness comes from getting and spending. Happiness comes from piling up boxes and boxes of things you’ll never use. Tommy Hilfiger, Von Dutch, Kate Spade, Armani, Gucci, Hermès, Mercedes-Benz, Ritz Carlton—brands and labels are what matter, not self-esteem and a hard day’s work or having loyal friends.

You’re a nobody—in your own eyes and in the eyes of others—unless you buy and own every cool product and service out there…and don’t you forget it.

Well, why should you take on that responsibility? That would involve [again] a good deal of self-restraint, self-discipline, and abstinence when it comes to buying everything you’ve always wanted. If you were responsible for your own finances, then you’d have to sit down with a calculator and a pad of paper and figure out what you could no longer afford. And that means that you might have to deny yourself on occasion.

Well, that’s just plain wrong and shouldn’t happen!

It’s never your fault what happens to you, and you shouldn’t have to discipline yourself—not now or ever. What kind of life would that be? A “fun” life? A life like you see in Vogue or Esquire? I don’t think so, do you?

Responsibility about money is for nerds and geeks. You’re a hippie, a free spirit, not an accountant. So do whatever you feel like doing, and let someone else worry about it.

8. If getting your finances together seems too difficult at any given time, turn everything over to a financial/ business manager who will have total control over your money

My advice is to find some trustworthy person who claims to be well versed in money management, go to her office with your check book and a power of attorney, and turn everything over to her. In this world, you can only trust a few select people with your money, but you’ll unerringly find the right one. A suggestion? Go for the one who charges the most. Don’t be happy with anyone who charges you less than 5 percent. Maybe even pay a few percentage points more for quality service.

Then, just send all your bills to her and have her pay them, let her withdraw money from your accounts for investments, and generally allow her to do everything but the heavy lifting. And don’t feel lazy for doing it. Many busy, important people like you have better things to do than worry about stuffy old money matters.

You may have heard those horror stories about financial managers who looted their clients mainly because these folks were too lazy to pay any attention to their financial statements. Pay no attention to any of this at all. It will never happen to you. There will never be a day of reckoning for trusting your future to someone whose interests might totally differ from yours and who might have the ethics of a snake.

9. Don’t think about retirement—it’s a l-o-o-n-n-g way off

The truth is [and you really need to remember this], that you’re young and vibrant no matter how old you might happen to be right now. You might be 20 or you might be 40 or you might be 60, but you’re still light years away from retirement. In fact, it’s so far down the road that you can’t even see it. And you know what? You never will be able to see it!

First, you won’t ever get old. Second, you won’t ever have to worry about money. And third, someone else will always take care of you. It’s all too boring to even think about it, so don’t. Plus, it’s really fun to be old and not have any money. It gives you the opportunity for fantasy and invention and trying new things…like poverty.

Retirement? Yawn. It just takes care of itself.

But what if someone has talked you into worrying about money? What if some fool has made you believe that you should invest in stocks or bonds? But let me give you a few words of advice if you’ve actually started to begin some kind of investment plan. This is important, so listen up…

10. Choose a broker based on his [or her] good looks, fashion sense, and gift of gab

That’s the way to choose a stockbroker! If your broker’s a looker, is nattily attired, and is in the finance business, he’s obviously made a ton of money for himself…and probably for his clients, too. That means he’ll make a lot of money for you as well, and then you’ll also find yourself hob-nobbing at The Polo Club and The Yacht Club and those other places where he hangs out.

The world of finance is a tricky, complex world, so what you want is someone who’s smooth-talking and confident. Your broker has to be able to convince you that he can do great things with your money by putting it in junk bonds and other areas too arcane for you to know about personally.

But please don’t make the mistake of asking your broker [or potential broker]—just what kind of education he has. Similarly, it would be rude and tasteless to ask him to give you references from satisfied clients. All you need to see is that he’s wearing an Armani suit, a Rolex, and Gucci shoes—and then you can breathe a sigh of relief because you know that your hard-earned money will be in good hands.

11. Convince yourself that you can beat the market without knowing anything about it

What, after all, does someone like you even have to know about the market? The nerds and geeks may have graduate degrees. Some money managers may have decades of experience. Some pundits like Warren Buffett may have an abundance of both. But you have your innate gambler’s luck and feel—the only cards you’ll ever need. You can tell just by the way you get out of bed in the morning in which direction the market is headed. You don’t need a system or education or information gleaned from late hours of study—you have that feeling in your fingertips. Call it instinct, call it luck, or call it by its rightful name: genius. You can forecast the market by just the feeling in your bones.

Economics? Marketing? Research on business cycles or specific industries? Nonsense! Just by hearing a company’s name you can tell if it’s a winner or a loser.

Don’t be a slave to some musty old library or some ponderous old computer. Just plunk down your money right this minute based on pure intuition.

This is definitely the way to play the market, and your way is the best way.

12. Don’t keep records

No record keeping for you! That’s for librarians and bookkeepers and hermits. And anyway, since you’re never going to have a financial plan and are never going to need money for retirement, why would you need to keep records?

When that time comes when the tax guys ask for your records for the last five years, just tell them that you’re not a clerk and you don’t have no wicked records, man! They’ll understand.

Plus, if your broker makes a mistake and you don’t have the records to prove she’s wrong, so what? The tax guys will just take your word for it. Just have another cocktail and another buffalo chicken wing and soon you won’t even remember that it’s almost tax time—oh, but that’s right, you don’t pay taxes. Ah, life is good!

13. Don’t worry about buying stocks when there’s a bubble going on—you’ll always know when to sell out just before the bubble bursts

There are a lot of old-fashioned measurements that tell old fogeys when stocks are cheap and when they’re expensive by historic measurements. These are ways to calculate the ratio of the stock’s price with respect to its earnings and dividends. When these get really, really high—when stocks are flying—those measurements are really high, too, and some curmudgeons call those times “bubbles” and tell you to stay away from buying stocks then.

What nonsense that is! When stocks are high-flyin’, that’s when it’s most fun to be in the stock market! How much fun is it to invest when stocks barely move at all, or at most, a few percent a year? It’s BO-RING.

So, why listen to the old creeps who tell you to beware when the stock market is at those levels? Why even pay a moment’s attention? If, in fact, the bubble is bound to burst, you’ll know about it and get out in plenty of time.

Uh, how will you know? Well, hasn’t Warren Buffett said that in a bubble, everyone says they’ll leave the party at midnight, only there are no clocks in the room? Yes, but so what? You don’t invest based on clocks and old fuddy-duddy rules. You invest by the intuitive feelings in your fingertips, and those feelings will also tell you when—exactly when—to sell, take your profits, and go hand out at Cap d’ Antibes.

14. Make sure you never hold your financial adviser or broker accountable—you want him to be your friend

There are measurements that come out regularly in Barron’s, The Wall Street Journal, and many other fine financial publications about how well the stock market has done in the past six months, the past year, or the past five years. They track broad market indexes like the S&P 500 and the Dow Jones 30 Industrials.

Please don’t make your financial adviser’s life difficult by comparing his picks and suggestions with this broad gauge. You only need to know that he’s your pal, that he takes your calls promptly, and basically, that’s it. If he’s a friend to you, talks to you, reassures you, and maybe occasionally takes you to lunch and picks up the tab, you know he’s your kind of guy. Don’t make him feel bad if other measurements are going up faster than your investments. He’s a nice family man with a good personality. That’s enough.

15. Start a business with inadequate capital—in a difficult field and in a difficult location—and expect to prosper

This essay could just as well be called “Open a Restaurant,” which is surely one of the best ways on earth to lose a ton of money, your spouse, and your peace of mind. But don’t let that thought worry you. No, forget what I just wrote. I was just kidding.

But, seriously, why don’t you open a restaurant in an area where millions of other people have started eateries that went out of business. Go ahead. It’ll be fine. Where everyone else—even people with experience—went down the tubes, you’ll succeed just because of your innate charisma.

So, start a restaurant—or any business where the failure rate is 90 percent or more—and you’ll be amazed to see how easy and fun it is and how much money you make. You won’t need to worry about burning through all your cash in a few months and being overwhelmed by debt. Nope, not you—‘cause you won’t make the same mistakes others made. You know better.

16. If taking charge of your financial life seems overwhelming now, just put it off for a few more years

There’s this old myth that says you should get movin’ right now on accomplishing your goals, because the more time you have to work on them, the more likely you are to attain them. And then there’s some old saw about how a journey is more likely to get finished if you start early in the morning.

What a load of bull! Didn’t the idiots who came up with those maxims realize how much fun it is to sleep late?

It takes a lot of mental effort to take charge of your finances. If it seems a bit burdensome right now, just wait a while until it seems like it would be less of a bother. Only when you’re really and truly up to it should you get yourself in gear to make plans for your financial future. Don’t worry about the time that passed while you were getting yourself organized. I’m sure it was good for something—if only for sleeping late, you movie star, you!

17. Believe that you can get rich quick—that you can get something for nothing

There are such things as free lunches! This one is so obvious that I don’t think I need to say much about it. It’s simply a statement of truth that a smart guy or gal like you was born knowing.

Basically, real riches appear overnight just by luck or chance or a bolt of inspiration. You don’t need to trade experience or labor or investments for wealth. If you’re on the right track, you’ll reap the financial rewards overnight…money will rain down on your house in torrents. Let me explain this a little further…

18. Know without a doubt that you don’t have to work hard—you only need to find an angle

Hard work gets you nowhere slowly. It’s for those without imagination. But you are different. You have that creative spark. You have that special magic that’s going to make you wake up one morning at 4 A.M., shout out, “Eureka!” and have the brainstorm that will bring you staggering wealth.

So don’t bother to work hard. Just take a lot of naps and wait for that flash of lightning to explode in your brain. The world is waiting breathlessly for you to come down from the mountaintop with your two tablets and your inspiration that will make the Ten Commandments seem comically insignificant.

Go for it. You just need that one clever angle.

19. Feel confident that you can borrow your way out of any problem

You know how I’ve been telling you over and over that you don’t need to save money? Well, some of you [who haven’t been listening very well] may have had a sneaking little thought enter your minds: What if I suddenly need money? How will I handle it if I don’t have any money saved up?

Good question, and it has a good answer: You borrow the money when you need it by getting a cash advance on your credit cards. Or go to a finance company and get a signature loan. And here’s a sneaky little tip: There are also special friends out there who will want to lend you money. Don’t even think about being too embarrassed to ask for a loan—or worrying about your buddies’ discomfort over being asked. Just ask for it—in fact, even demand it! What are friends for? They’ve probably been boring and practical enough to save, so what’s the point of saving if not to do nice things for other people? So, go for it.

And here’s another word of advice: When you get that borrowed money, don’t repay it. Think about it for a moment. How are you any better if you borrow a thousand bucks and then a few weeks later repay a thousand bucks? You’re in exactly the same position you were before. But if you borrow the thousand and then don’t repay it, or only repay a little of it, you’ve made a profit! It’s like it was a gift. So, borrow, allow your pals to feel good about helping you out, and then go on your merry way.

20. Don’t bother to provide for your spouse or your children

Don’t bother sacrificing one single thing for your kids or your spouse so that they’ll be better off or well provided for when you die. What will it mean to you? You’ll be dead anyway. Why should you have to sacrifice a trip or a new boat to buy insurance for your family? It’s all about you, you, you, anyway, and once you’re gone, the world ends, too. What possible concern could it be of yours that your spouse or kids might have to scrimp and save when you’re gone? They’re only your flesh and blood.

What about setting up accounts for your kids so they can pay for college or make a down payment on a home? No way. There are scholarships. There are student loans and jobs. Or they can go without college. It might do them good to go out and work right after high school. Why coddle them with money when you could have so much more fun coddling yourself?

So basically, just devote your life to thinking about your own wants and needs, and let the chips fall where they may.

Well, all right then. If you’ve read this far, it’s just possible that you have some idea what you’re doing wrong. Let me assure you that if you just keep on doing what you’re doing, things will only get worse. I’ve said it before and I’ll say it again: “If nothing changes, nothing changes.”

Ben Stein studied economics at Columbia University and was also lucky enough to study finance at Yale while he attended Yale Law School. Ben has served as an economist, trial lawyer, speechwriter, teacher of law and economics, columnist for The Wall Street Journal, writer on finance, commentator on finance on television, frequent witness at Congressional hearings about finance, and author of many books about personal finance.

Our Credo: We believe it is possible to live on a more peaceful planet, where love is valued more than success, where relationships take precedence over possessions, where prevention is trusted more than cure, where peace is more important than victory, where abundance flows to everyone, and fear is conspicuous by its absence. Yes, we believe it is possible to create heaven on Earth. But it’s a choice we must make.